As noted above, the latest announcement from Sony is the next step in a series of recent moves designed to return its TV business to profitability. So far, these plans have involved halving annual planned shipments from 2012 onwards to approximately 20m from a previous target of 40m, creating a clear division within the business between the mass-produced, largely commoditised low-end LCD market and the next-generation TVs, and limiting or removing existing agreements for LCD panel sourcing, potentially in favour of cheaper, foreign imports from Taiwan or China.

The strategy gives a clear indication of where Sony wishes to position itself. Regardless of whether the low-end, sub 40-inch LCD TV market is commoditised or not, it accounted for 177m shipments in 2011 globally, or 86% of the total LCD market. As a key player in multiple consumer electronics markets, particularly games consoles and laptops, Sony has developed the "Sony Entertainment Network" (formerly "Qriocity") in order to create a branded ecosystem across its connected devices in the living room, where the TV remains pivotal. With this in mind, Sony cannot afford to exit the TV business and lose access to such a large potential installed base - particularly with the growing prominence of internet-enabled TVs (IETVs).

However, the challenge then becomes one of efficiency - minimising both production costs and inventories to avoid losses. The previous joint venture with Samsung proved costly for Sony, as falling LCD shipments had led to them taking penalties from Samsung for failure to order previously agreed-upon deliveries. By lowering volume targets, and outsourcing panel production to potentially cheaper OEMs, Sony is attempting to minimise the risk of large-scale over-ordering which has damaged it previously and lower the average price for production of a TV (although of course larger scale can be beneficial in negotiating with panel manufacturers).